The Federal government has inaugurated a Finance Committee on the wholesaler Impact Investment Fund (WIIF) to raise $100b to close the gaps in financing the micro small and medium enterprises in Nigeria through impact and investing.
Inaugurating the committee recently in Abuja, the Minister of State, Budget and National planning, Prince Clem Agba, explained that the concept of impact investment had evolved in various climes, as a sound approach in leveraging private investments for jobs and wealth creation, balancing inequities and fostering long-term structural change through the financing of micro, small and medium scale enterprise (MSMES).
Prince Agba charged the committee “to unlock local private investments using capital from public sources and to delve into strategies for attracting investments from Development Finance Institutions (DIFS) into the impact investing ecosystem”.
He said, “in outlining strategies for achieving development aspirations, the National Development Plan 2021-2025 has clearly identified opportunities for mainstreaming the concept for productivity in various areas of the economy for improved activities through impact investing in up scaling renewable energy capacities, utilization of our natural resources for import substitution and enhanced foreign exchange earnings, building a circular economy as well as strengthening, preparedness and responsibilities to disaster management across the geo-political regions”.
The Minister also pointed out that “It is worthy of note that the capital deployed for Impacting investing in Nigeria considerably increased by 147% from $1.9billion in 2015 to $4.7billion in 2019 before a decline to $2.7billion in 2021. This decline is attributable to economic shocks related to the covid-19 pandemic. Considering the potential for returns and positive public benefits the Government will continue to support the private sector and realign the current extant regime for robust impact investing in the country”.
“As an aftermath of the recent launch of the resign for the wholesaler impact investment fund, the Nigerian Competitiveness support programmes (NICOP) have appointed me as official champion of the viable wholesaler impact investment fund in Nigeria”.
“This is a challenge which calls for the government to collaborate with the private sector and international development partners for adequate implementation. In this regard, a wholesale impact investment fund is conceived to raise about $100 Billion to sustainably cover the gaps in financing our MSMES through impact investing”.
He further explained that the key mandate of the finance committee was specifically to secure the government’s commitment and contribution to the initial seed capital of the proposed Fund and provide guidance to the Nigerian Advisory Board for impact investing on engagements with the Government.
He stressed that the committee which had till December 2023 to complete its assignment had terms of reference which included: to review the proposed framework and recommendations of the wholesale impact investment fund; provide guidance and facilitate the government consent/commitment to contribute up to 90% of the seed capital of the fund, that is N100billion; identity other relevant MDAs to join the committee and lead government engagement on the fund.
Other terms of reference were, to “identify and incorporate key government members on the governing council of the fund; work closely with Nigeria Advisor Board for impact investing; provide guidance and participation in the setup and running of the fund, as well as facilitate the incorporation of the fund with all relevant regulatory authorities, namely: The Corporate Affairs Commission (CAC); Central Bank of Nigeria (CBN), Securities and Exchange Commission (SEC)”, among others.
He further stated that the membership of the committee is drawn from relevant Ministries, Department and Agencies as well as the Nigerian Advisory Board for impact investing under the chairmanship of the Permanent Secretary, Federal Ministry of Finance, while the National Planning Arm of the ministry will serve as the secretariat.
Also speaking, Mrs. Toyin Sanni, Chairperson, National Advisory Board for impact Investing lauded the initiative and said it was an important solution for closing gaps in financing MSMES in Nigeria as it would benefit those at the bottom of the pyramid in MSMES sub-sector
The chairman of the Committee, Aliyu Ahmed, pledged that the committee would work assiduously in realizing the objectives for setting up the committee.
Ahmed, who is also the Permanent Secretary, Federal Ministry of Finance, Budget and National Planning, described the assignment as a noble one.